As the DEA reported its largest-ever bust of synthetic-drug dealers and manufacturers, the U.N. admitted that its law-enforcement efforts to contain illegal drugs have largely failed.

In an unusually frank admission in its annual World Drug Report, the U.N. conceded that its programs to create a “drug free” world have done little to control the emergence of man-made drugs like bath salts. But a new law in New Zealand could offer an alternative to the U.N.’s failed policies.

“While new harmful substances have been emerging with unfailing regularity on the drug scene, the international drug control system is floundering, for the first time, under the speed and creativity of the phenomenon known as new psychoactive substances,” the U.N. report conceded.

Its authors noted that the number of recently identified drugs — typically sold as “legal highs,” which mimic cannabis or methamphetamine, but often labeled as innocuous substances like “bath salts” — is now greater than that of internationally known controlled substances. With names like “miaow miaow” (mephedrone) or “spice” (which includes various synthetic marijuana-like drugs), 251 new substances intended for use as recreational drugs have been identified by international authorities. Under international drug-control conventions, only 234 drugs — including old-school favorites like cocaine and heroin — are currently considered illegal in all countries.

The DEA’s big bust, meanwhile, netted 2,000 lb. of the new drugs and 150 arrest warrants. Earlier results of the same investigation led to the seizure of $15 million in cash and assets and 75 arrests.

But with 11% of American high school seniors already reporting use of some type of “legal high” (overwhelmingly synthetic marijuana) in the past year, such arrests are clearly unable to hold back the tide of synthetic-drug use. More 12th graders used synthetic marijuana (11%) in the past year than took prescription painkillers (8%), heroin (.8%) or stimulants like Adderall (8%), according to the most recent national survey in 2011.

Nonetheless, the U.N. continues to stand by its international antidrug laws, which have not been revised significantly since 1988. In a preface to its report, the U.N. drug czar Yuri Fedotov wrote that member states “remain committed to the drug-control system” despite admitting that “globally, the demand for drugs has not been substantially reduced.” He offers no particular rationale for doing more of the same, simply calling for the rules to be “strengthened” and arguing, again, without providing specifics, that the system actually is “equipped to deal with the emergence of new substances.”

New Zealand thinks otherwise. The country has had significant problems with legal highs since at least 2000, particularly with an amphetamine-like drug called benzylpiperazine (BZP). After catching on in California and being banned by the DEA, the drug became a popular source of highs in the 2000s, sold as an “herbal” or “natural” supplement with no regulations to stop it.

By 2008, when New Zealand outlawed BZP, sales were estimated at about $19 million to $27 million annually, with 5 million pills sold in 2007 alone. At first, New Zealand’s government played the same cat-and-mouse game with manufacturers of such substances that other countries still engage in globally. “Since we introduced the first of the temporary bans in August 2011, I’ve banned 33 separate substances, 51 or 52 different products and they keep being reformulated and reappearing,” New Zealand’s Associate Health Minister Peter Dunne told the New Zealand Herald, summarizing the revolving door of formulations that has kept the synthetic-drug business alive around the world

Now, however, the government is trying another approach. Rather than chasing after chemists but doing little to stop them from introducing new, unknown and potentially addictive products for uncontrolled human experimentation, New Zealand is proposing to regulate the drugs. Just as the U.S. Food and Drug Administration was founded decades ago to prevent sales of adulterated and risky medical drugs, New Zealand will be the first country to create a similar approval process for new recreational drugs.

The new law, which is expected to be enacted in August, has generated worldwide interest. Companies will have to pay around $140,000 just to apply to have their products licensed and must spend an estimated $800,000 to $1.5 million to conduct clinical trials, which include human subjects, to prove their safety. Government-appointed scientists will judge the safety standards guiding these trials — but the law is not clear on whether the bar will be so high that most of the drugs will remain prohibited.

The law bans sales to youths under 18, advertising anywhere other than at the point of sale and requires that all ingredients be listed on the label, which must also include contact information for a poisoning hotline. The mandate for ingredients is crucial, since many synthetic drugs are made without safety or sterility standards and could contain toxic compounds, not to mention discarded drug candidates that have already been deemed unsafe for human use by the pharmaceutical companies that developed them. But whether companies will actually try to go through the approval process — and whether this will generate interest from Big Pharma to enter this potentially huge new market — remains to be seen.

Legalizing and regulating recreational drugs is obviously controversial. Would government approval signal an endorsement? The FDA recently approved its first cigarettes under new powers that give the agency authority to review the safety of certain tobacco products. While the FDA made clear that the approval only indicated that the cigarettes were no more dangerous than existing smokes on the market, critics fear that new types of tobacco products like “vaping” with e-cigarettes could reverse the current momentum toward eliminating smoking. If New Zealand starts to regulate and “approve” synthetic drugs, it could affect drug-use trends in unknown ways — even if the drugs it approves do turn out to carry fewer risks.

What is clear, however, is that outright prohibition has failed and that something needs to be done to address the conveyor belt of man-made products that are pouring into citizens worldwide, with no regulation and no oversight. Is New Zealand leading the way, or opening a Pandora’s box of new woes that will dwarf our current drug problem? History suggests that regulation reduces more harm than Prohibition.